Bain Can you assist

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znunz1

Economics

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hi bain heres one more can you help

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Need responses for both initial response Jennifer Good day Professor and class, According to the Credit InfoCenter.com, simply stated, mortgage lenders make more money when they sell a mortgage because they make a commission on it. For example when “a bank makes a "point" on a package of loans worth one million dollars they will make $10,000 dollars (1% of $1,000,000), an immediate profit by selling them” (para.4). It is beneficial for the bank because these are feed-up funds the bank can now loan to other consumers and the banker continues to make a profit. Through my research, I could not find anything “bad” per se, about a lender selling a borrower’s loan. I personally believe it would be difficult for a borrower to follow who has control of their mortgage especially if their loan is sold many times. Other than that as long as the mortgage loan and/or contact was followed, I do not see the bad side to a lender selling a mortgage. I believe if a lender can make money on top of money, legally, then they are going to do it no matter what. If this includes selling someone’s mortgage to turn a profit, so be it. As stated by the Federal Trade Commission (FTC), a reverse mortgage is only for individuals “62 years old or older, who need money to finance a home improvement, pay off a current mortgage, supplement retirement income or pay for healthcare expenses. A reverse mortgage allows mature adults to convert part of the equity in their home to cash, without having to sell their home or pay additional monthly bills” (FTC. para.1). This type of loan is called a reverse mortgage because the way a borrower pays for this mortgage is reversed. With a reverse mortgage, the lender makes payments to the borrower of the loan not the other way around. For the most part if an individual can afford this type of loan as a mature adult, as stated above, there are many benefits to a reverse mortgage. However, the FTC states certain types of reverse mortgages can be quite expensive and more so than a regular home mortgage. But as I stated earlier if one can afford it, is a great way to get some extra cash (FTC, para.4). ReferencesFederal Trade Commission, Consumer Information (2011, March). Reverse Mortgages. Retrieved from http://www.consumer.ftc.gov/articles/0192-reverse-mortgagesThe MortgageProfessor.com. (2009, June 30). Why Do Most Lenders Sell Their Mortgages? Retrieved from http://www.mtgprofessor.com/A%20%20Type%20of%20Loan%20Provider/why_do_most_lenders_sell_their_mortgages.htmCredi t InfoCenter.com. (2011, May 25). Why Do the Banks Keep Selling My Mortgage Loan? Retrieved from http://www.creditinfocenter.com/mortgage/sellloans.shtmlHave a great day all,Jenn
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